Right to Terminate - ISDA Provision: Difference between revisions

Right to Terminate - ISDA Provision (view source)

Revision as of 14:32, 6 August 2018

1,552 bytes added , 6 August 2018

no edit summary

Amwelladmin

Bureaucrats, Interface administrators, Administrators

82,891

edits

@@ Line 1: / Line 1: @@
 {{isdaanat|6(b)(iv)}}
+What a beast. If you track it through in nutshell terms, it isn’t as bad as it first seems, but you have the derivative lawyer’s gift for over-complication, and the ISDA drafter’s yen for dismal drafting, to thank for this being the trial it is. Here is how it works.
+Keep in mind that, unlike {{isdaprov|Events of Default}}, {{isdaprov|Termination Event}}s can arise through no fault of the {{isdaprov|Affected Party}} and are not always apocalyptic in consequence. Depending what they are, they may be cured, worked around, or dented Transactions may be surgically trimmed out, allowing the remainder of the Agreement, and the Unaffected Transactions, to carry on as normal. So here goes:
+====Divide up the types of {{isdaprov|Termination Event}}====
+# {{isdaprov|Illegality}} and {{isdaprov|Force Majeure}}: Here there may be a {{isdaprov|Waiting Period}} to sit through, to see whether the difficulty clears (For {{isdaprov|Force Majeure Event}} it is eight {{isdaprov|Local Business Day}}s; for {{isdaprov|Illegality}} ''other than one preventing performance of a {{isdaprov|Credit Support Document}}'': three {{isdaprov|Local Business Day}}s; Sit through it.
+:Why is there exception for performance of a {{isdaprov|Credit Support Document}}? Because, even though it might not be your fault, illegality of a {{isdaprov|Credit Support Document}} profoundly changes your credit assessment (in a way that arguably, even a payment or delivery obligation doesn’t), and that is the most fundamental risk you are managing under the {{sdama}}.